Newspaper article THE JOURNAL RECORD

Despite Talk, Don't Count on Major Tax Savings

Newspaper article THE JOURNAL RECORD

Despite Talk, Don't Count on Major Tax Savings

Article excerpt

Despite all the talk, a major tax cut is unlikely in Oklahoma in 1998, based on history and other factors.

Of course, one can quibble over the word, "major," and there does appear to be momentum for a tax cut. But even the most ardent proponents aren't predicting that the Democratic majority will embrace a tax cut of the magnitude Republican Gov. Frank Keating is proposing.

It may sound trite, but it comes down to a question of money, the lack of it, and the demands for it. Working against a massive tax reduction is a philosophical difference between Republicans and Democrats over whether bolstering education funding or cutting taxes is the best strategy for future state growth. Keating and his chief financial adviser, Finance Secretary Tom Daxon, are supply-siders who argue ardently that tax cuts will translate to prosperity for all. But Democratic leaders cite statistics showing a correlation between education funding and a state's economic well-being. Oklahoma ranks near the bottom of the 50 states in funding for schools. Democrats also question whether the state's tax base should be significantly reduced in light of State Question 640, the constitutional amendment that severely restricts the ability of lawmakers to raise taxes. It was only two years ago that Oklahoma 2000, an affiliate of the state Chamber of Commerce, released an economic forecast warning that state government could face a $440 million budget problem in the year 2004. The report cited too much reliance on slow-growing sales taxes, the effects of State Question 640, the need to pick up programs abandoned by the federal government and an increase in relatively low-paying service jobs. In addition to the economic debate, cynics point out that this is an election year, when there is a natural pull for politicians to make tax-cut proposals. …

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